Pods & Recs: No. 150
Today we have a deep dive into the food ecosystem, Joel Greenblatt on policy fixes to help shrink the wealth disparity in the U.S., the Cboe on options, the VIX and tail risk hedging, and a PM from GMO on their climate change strategy.
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Trillions: Is ARK the New Janus Twenty? Cathie Wood of ARK has been running a highly concentrated portfolio and crushing the market, leading to huge inflows. This episode takes a look at a fund that experienced something similar in the late 1990’s and early 2000’s. Scott Schoelzel was the PM of the Janus Twenty Fund from 1998–2007 and takes a look back at what it was like to have a similar experience, what advice he has for Cathie, and how what she is doing now differs from his performance. He offers the shocking statistic that 75% of all mutual fund inflows at one point were going into the Janus Twenty Fund. [January 7, 2021–42 minutes] iTunes Podcast | Spotify | Google | Breaker | Website Link
This Week In Startups: Joel Greenblatt on understanding market factors, improving public education, reducing income inequality & more. Joel Greenblatt is the Managing Principal and Co-Chief Investment Officer of Gotham Asset Management, a successor to Gotham Capital, which focuses on a long/short valuation-based investment philosophy. He’s also the author of multiple books, including his most recent, Common Sense: The Investor’s Guide to Equality, Opportunity, and Growth. The episode starts with his take on the evolution of private and public markets over the years and has him look back at some of his biggest misses in his career, including Apple and Walmart. Then they dive into topics he covers in his most recent book, which offers policy suggestions based on research and not policy affiliation. He looks at the issues with the U.S. school system and teacher unions preventing schools from innovating or charter schools to create accountability and an alternative. He also touches on the benefits of an earned income tax credit, why the U.S. needs to encourage immigration, high paying jobs, and how to help fix the retirement crisis in the country.[January 8, 2021–1 hour, 32 minutes] iTunes Podcast | Spotify | Google | Breaker | Website Link
Invest Like The Best: Zack Fuss — Breaking Down the Food Ecosystem. This is a fun episode about the food ecosystem with Zack Fuss from Continental Grain. They explore how businesses operate at different points along the value chain, how legacy food businesses are adapting to 2021 with delivery and other areas of revenue, and then explore different specific businesses. Fuss does a deep dive into Domino’s Pizza, saying it could be considered the first cloud kitchen. They also look at other companies that have been able to “build-once, sell many times,” like Dollar General and Chipotle. Finally, they look at the business model from the franchisee perspective, the future of alternative meat companies, and other trends in the food space. [January 12, 2021–1 hour, 19 minutes] iTunes Podcast | Spotify | Google | Breaker | Website Link
There are 3,000 more Dollar Generals in the U.S. than there are McDonalds’.
The Phil Bak Podcast: Mike Alfred: Fintech & Cryptotech. Alfred has a phenomenal story of entrepreneurship in the fintech and crypto space, first around 401(k) plans and recently with Digital Assets Data (which was bought last week by NYDIG). He walks through his career and why he was surprised he felt unfulfilled after he sold his first business. Then he makes the pitch for bitcoin, explains why he’s so bullish long-term, and breaks down the low hanging fruit for the fintech sector to disrupt. [January 8, 2021–35 minutes] iTunes Podcast | Spotify | Google | Breaker | Website Link
The Acquirers Podcast: Special Ops: Andrew Walker talks SPACs, spec sits and value. Another great value investing episode with Tobias Carlisle and Andrew Walker of Rangeley Capital. As much as SPACs are said to be a poor investment, he makes the case they actually can be a great opportunity if analyzed correctly. He covers special situations with companies like $IAC and $MTCH, explains why he thinks spinoffs now result in the company that remains after the spinoff having more value, and reviews the history of names selling off after giants like Amazon and Facebook announcing they want to make inroads within that market and how that provides opportunities. Finally, he talks about betting on founders who are trying to make their second product, like Jack Dorsey with Square and possibly Drew Houston (Dropbox). [January 11, 2021–47 minutes] iTunes Podcast | Spotify | Google | Breaker | Website Link
The Meb Faber Show
The Meb Faber Show: #278: Lucas White, GMO — Since Inception Of The Strategy…We’ve Been Buying Companies At A Significant Discount, Yet Our Portfolio Has Had Earnings Growth That Far Exceeded The Broad Equity Market. White is the portfolio manager for the Resources and Climate Change Strategies at GMO, the famous value focused shop. The episode is all about why resources offer a great opportunity — he says they are trading at an 80% discount to the broad market. He explains why the sector is so neglected by the market, which is why he thinks it offers such a great risk/reward. He talks about the tailwinds to the space, specifically for things like copper and lithium. Then he talks about climate change and why GMO decided to launch a strategy focused on that space. He talks about trends within the space and how the firm has been able to apply their value lens to a growth area. [January 11, 2021–57 minutes] iTunes Podcast | Spotify | Google | Breaker | Website Link
The Meb Faber Show: #279: Kevin Davitt and John Hiatt, Cboe — Relative To The Overall Portfolio, Small Allocations To Tail Risk Ideas Can Have An Outsized Impact. Cboe’s Davitt and Hiatt are a must listen on options, volatility, and tail risk hedging. They explain how 2020 had been with elevated volatility and record levels of option volume. Then they start with some basics of the VIX, how investors use and misuse it, and how it can be used as a market indicator. Finally, they dive into tail risk hedging: the complexities around it, how and when to implement it, and how to judge if it is successful during a market downturn like March 2020. [January 13, 2021–1 hour, 7 minutes] iTunes Podcast | Spotify | Google | Breaker | Website Link
Annie Duke (Former Poker Player, Decision-Making Expert):
- The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing by Michael Mauboussin
Dave Collum (Professor, Cornell):
Jim Schlossnagle (TCU Baseball Head Coach):